Google's new OS raises privacy, antitrust concerns

Google's announcement Tuesday that it is developing an open-source operating system raised questions among privacy advocates about the amount of personal data Google will be able to collect.

Google already collects private data through products like its search engine and its Gmail e-mail service, as well as its AdSense advertising service. The Chrome operating system, to be rolled out on netbook computers next year, gives the company another avenue to collect and monetize personal information, privacy advocates said Wednesday.

"Competition in the OS market should always be welcome, but Google is the special case," said Marc Rotenberg, president of the Electronic Privacy Information Center, a privacy advocacy group. "It has become dominant across many essential Internet services -- search, mail, video, online apps and advertising."

Google has a growing profile of Web users and has been reluctant to support some privacy safeguards, Rotenberg added. For example, Google has been cool to proposals to require that online vendors get opt-in permission before collecting customers' personal data.

Rotenberg said he expects antitrust officials in the U.S. and Europe to "view Google's entry into the OS market with enormous skepticism."

Jeffrey Chester, executive director of the Center for Digital Democracy, another privacy advocate, agreed. "I think the new OS has to be placed under the data collection x-ray by U.S. and E.U. privacy regulators and advocates," he said. "Any expansion into the marketplace by either Google or Microsoft should generate intense scrutiny, especially for the privacy implications."

Google's entrance into the OS market "clearly" raises some privacy concerns, said Ari Schwartz, vice president at the Center for Democracy and Technology, a privacy and civil liberties advocacy group. While Google does a good job protecting privacy within individual products or services, the company has challenges with guarding privacy across its suite of offerings as a whole, Schwartz said.

Google has recently worked on giving users control of their privacy settings for targeted online advertising, but Schwartz said he's unsure how more user privacy controls would work in an operating system environment. "We'd like to see them innovate in that area, but that remains to be seen," he said.

Google spokesman Adam Kovacevich said user privacy will be among the top priorities as the company develops the new operating system.

"The product is still being developed ... but we'll consider privacy protections when we build the product, as we do with all our other products," he said. "We always build privacy into our products from the very beginning, and this will be no exception."

Google's expanding online empire creates not only privacy questions, but antitrust ones as well, said Steve Pociask, president of the American Consumer Institute Center for Citizen Research, a think tank that has been critical of Google in the past. Google's Chrome operating system would run on top of the Linux kernel and be primarily Web-based, Google said.

"Given Google's dominance and near-monopoly position in a number of markets, when it leverages its power to other markets like this new one, policymakers and regulators need to take note," Pociask said. "They should be concerned."

On the surface, it may appear that Google has not violated antitrust law, Pociask added.

"But there are real anti-competitive risks," he said. "Not from the operating system per se as much as it is from the whole online dominance we're seeing."

Other antitrust experts disagreed, saying Google's entrance into the OS market would benefit consumers by creating a legitimate competitor to Microsoft's Windows.

Google has recently faced other antitrust probes, with the U.S. Department of Justice looking into its digital book settlement with publishers, and ties between the Google and Apple boards. The DOJ has also opposed an advertising deal with rival Yahoo.

But Google's entrance into the OS market is the "opposite of something raising antitrust concerns," said Evan Stewart, a partner with the Zuckerman Spaeder law firm. "This looks like extremely healthy, competitive, consumer-benefiting innovation."

"More competition in the operating system market has got to be viewed as a good thing," said Keith Hylton, a professor at the Boston University School of Law.

If anything, Google's move may give Microsoft an argument before antitrust regulators in Europe and the Far East that there is strong competition for OSes, Hylton said.

However, it also raises questions about whether Google acted fairly when it complained to antitrust authorities in recent years about some Microsoft OS decisions, and when it worked to prevent Microsoft from acquiring Yahoo, he said.

"All that stuff looks a little bit stranger now that Google has entered the operating system market," he said.

"Now it looks like the classic business of fending off rivals from your own markets when you're trying to enter theirs. I guess that's taking advantage of everything you can, but that doesn't appear to be honorable behavior."

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